GlossaryKind of term: Cost and economicsAlloy surcharge
What is an alloy surcharge?
The alloy surcharge is the part of the price of stainless steel and other high-alloy materials that moves with the quoted prices of alloying elements.
The alloy surcharge is an addition to the base price of stainless steel, nickel alloys and some alloy steels. It tracks the quoted prices of alloying elements such as nickel, chromium and molybdenum. Producers usually publish it monthly for each grade, and stockholders pass it on either as a separate line or built into the price per kilo. A grade with more nickel and added molybdenum, such as 1.4404, carries a higher surcharge than 1.4301 at the same element prices.
What is the alloy surcharge based on?
The surcharge is calculated by a producer's formula: the difference between the average quoted prices of the alloying elements over a reference period before the month of application and a fixed basis value, weighted by their content in the grade. Formula and period differ between producers. The same grade can therefore carry a different surcharge from two suppliers, and the surcharge lags behind the raw-material market.
How does the alloy surcharge work in practice?
In stainless the surcharge can make up a large share of the price per kilo. An estimate without it, or with an earlier month's, will then differ from the invoice at delivery; which month applies is set in your supplier's terms. On a quote with a long validity or under a framework agreement, record the surcharge and month you priced with, or include a price adjustment clause for material.
What is the alloy surcharge often confused with?
The surcharge is not the base price: the base price is the supplier's price for a grade, form and size, and the surcharge is added on top by a formula on raw-material prices. Nor is it a market reference: a published price or index shows how a raw material moves, while the surcharge is the amount per kilo on your invoice.
How do you see the alloy surcharge in Blake?
In Blake your purchase price for each material is held in the materials catalogue with source and date, and earlier prices stay in its history. If your supplier charges base price plus surcharge, you record the total with the date it applied. A market reference sits beside it, with its own source and date, as a reference and never as a purchase price. More on materials.
Frequently asked questions
How is the alloy surcharge calculated?
The difference between average quoted prices of nickel, chromium, molybdenum and other alloying elements over a reference period and a fixed basis value, weighted by their content in the grade. Formula and period differ by producer; it is usually published monthly per grade.
Does the surcharge of the order month or the delivery month apply?
Your supplier's terms decide. Often the surcharge of the month of delivery or dispatch applies, sometimes that of the order confirmation. Ask when the lead time is long, and note the month with your estimate.
What is the steel price in 2026?
There is no single steel price. It varies by grade, form, size, quantity and supplier, and for stainless by month through the alloy surcharge. Get a price for the size you buy, record it with its date and follow a public index.